Dealers Eye Mass-Market Home Control, Monitoring - Twice

Dealers Eye Mass-Market Home Control, Monitoring

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NEW YORK — Online retailers, direct marketers and security-monitoring companies championed no-new-wires home-monitoring and control products in recent years.

Now, mainstream brick-and-mortar retailers have begun to raise the home-automation banner now that the market has grown beyond hobbyists to appeal to massmarket consumers.

“Online retailers developed the market, and brick-andmortar retailers are waking up to it,” said Mark Walters, chairman of the Z-Wave Alliance. “Amazon led the way for years,” and now “everyone is talking about it.”

Some brick-and-mortar retailers, however, have stopped talking and have begun to implement home-automation programs, though the largest brick-and-mortar retailers, except for Lowe’s, have yet to aggressively promote their offerings, marketers said.

For its part, Staples set up Staples Connect displays in only 30 stores last November but plans to expand availability of its Zonoff-platform homemonitoring and control system to an unspecified number of additional stores.

One of the most aggressive retailers is Lowe’s, which rolled out in-store displays nationwide for its Iris system following an initial launch of its AlertMe-provided platform in July 2012.

With consumer and retailer interest growing, more homeautomation suppliers are targeting brick-and-mortar CE channels. Longtime vendor SmartLabs sold its Insteonbrand products through its website and other online retailers such as Amazon, but the company has expanded sales to select Best Buy, Costco and Home Depot brick-and-mortar stores and plans to expand to more brick-and-mortar outlets, a spokesman said. SmartLabs also sells through the three chains’ online stores.

The market’s potential has not only attracted more retailers but also home-automation start-ups such as Revolv and Smart Things. They initially sold direct to consumers but expanded sales of their home-automation hubs through Amazon. Revolv also said it plans to sell to Home Depot.

For its part, Mios started out selling its Vera-brand hub on its website and through online and brick-andmortar retailers about seven years ago, then in in 2010 began offering its home-automation platform to service providers after retail sales proved the platform’s viability to them.

All three companies sell hubs that incorporate multiple wireless technologies to enable smartphone, tablet and PC control of other-brand equipment through a single integrated app rather than through multiple individual apps.

“We’re seeing the consumerization of home automation and control,” said Jim Annes, AVAD’s VP/general manager. “It’s a trend that’s continuing and will only accelerate.” Rapid technological advances “took what was purely custom and cost a fortune 10 years ago and brought it to $59.”

The trend is forcing suppliers of custom-installed home-automation systems to stay ahead of mass-market systems whose sophistication is growing. “This is like an arms race,” Annes said.

Gigaom Research pointed to multiple factors driving home automation into the mass market. Smart-home technology has been available since the 1970s, a Gigaom report said, “but until recently it has been relegated to niche market status, available to either the very affluent or to tech-savvy hobbyists keen to link a selection of disparate components.” Now, however, “the building blocks that will finally see it realize its huge potential have now fallen into place,” Gigaom contended.

Reasons include “the maturation of mostly standardsbased wireless connectivity technologies such as Wi-Fi, ZigBee and Z-Wave, and the development of open, Cloudbased software platforms have ensured that vendors can offer smart-home solutions at a fraction of the price of traditional systems,” Gigaom said.

Other factors include the high household penetration of smartphones and tablets, whose processing power can be harnessed to control and monitor home systems from within the house or from a remote location, Gigaom said.

The business took off in 2007 with the introduction of the iPhone, agreed Parks analyst Tom Kerber.

The current biggest sellers, he said, are door locks, lights and thermostats, but consumers are interested in a broad range of features, a Parks survey found. “When consumers in U.S. broadband households are presented with a variety of smart-home features … 50 percent show strong interest in 11 or more features,” Parks said.

The survey also found that “consumers consistently rate safety features, such as detectors for smoke, carbon monoxide, and gas leaks as the most important elements in a smart-home or security system.” Security and energy-management capabilities are closely behind.

Retailers tapping into demand can enter the market in one of two ways. One is by selling stand-alone products, such as door locks or in-wall light dimmers. Each type and brand of product is controlled by its own app. These systems might use different wireless technologies such as Z-Wave, ZigBee, proprietary versions of ZigBee and other proprietary RF technologies. In this scenario, users must launch separate apps and connect separate bridges to their home Wi-Fi network to enable in-house control from a smartphone or tablet.

The second way is to offer a hub that incorporates multiple wireless technologies, connects to multiple types of homes systems, and enables a single integrated app to control a variety of products. The hubs also enable different systems to talk to one another and let users set up automated activities. Consumers approaching their house, for example, could activate a garage-door opener, which signals select lights to turn on in and out of the house.

These hubs can also potentially connect to major appliances that incorporate Wi-Fi and suppliers’ proprietary communications protocols. In fact, Zonoff plans to add wireless connectivity to white-goods products, said Zonoff CEO Mike Harris.

“Multilingual” hubs are available from platform providers Zonoff and AlertMe as well as from such hardware vendors as Revolv, Smart Things and Vera Control.

Z-Wave’s Walters said retailers and buying groups can work with OEMs and app developer to create house-brand hubs and their own app.

Whether house-branded or not, hubs enable remote monitoring and control of multiple types of products from computers, smartphones and tablets.

In most cases, remote monitoring and control of multiple types of products is delivered through Cloud-based services, such as those offered by Zonoff and AlertMe for the Staples and Lowe’s house-brand systems. Some services are free. Step-up services require a subscription, whose revenues are shared with retailers.

HOME-AUTOMATION PLATFORM, SERVICE PROVIDERS AND THEIR TARGET CUSTOMERS

Zonoff, Malvern, Pa.

Retailers, systems integrators, CE suppliers, service providers. Provides platform for Staples Connect products and service. zonoff.com

AlertMe, London, Cornelius, N.C

Targets retailers, retail energy providers. Provides platform and hub for Lowe’s Iris system. alertme.com

Mios, Hong Kong, Oakland, Calif.

Targets platform to CE suppliers, retailers, telcos, cable providers, and health care and property-management industries. URC uses its platform. Also sells under Vera Control brand on its website and through other online retailers. mios.com

Alarm.com, Vienna, Va.

Targets security channels, including integrators. Vivint sells Alarm.com service to consumers. alarm.com

(Other platform providers, such as iControl Networks of Redwood City, Calif., target security-monitoring companies and other service providers, but iControl noted that retail will play a larger role in the industry and that iControl will “continue to provide solutions through service providers and security companies that may choose to leverage this channel.”)

Sources: Parks Associates, Z-Wave Alliance, companies

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